Liquor Production: Empowering Farmers and Small-Scale Entrepreneurs

In June 2025, the Royal Gazette of Thailand published the Excise Tax Act (No. 2) B.E. 2568 (2025), marking a significant reform in the country’s liquor production regulations. Effective June 6, 2025, this legislation amends the Excise Tax Act B.E. 2560 (2017) to facilitate greater access to legal liquor production licenses for farmers, cooperatives, community enterprises, and small-scale entrepreneurs. The act aims to promote economic fairness, support local agriculture, and reduce barriers to entry in the liquor industry while ensuring consumer protection and regulatory compliance.

Background and Purpose:

The Excise Tax Act (No. 2) B.E. 2568 (2025) was enacted to address the restrictive nature of previous regulations, which limited opportunities for small-scale producers to legally enter the liquor market. By revising Section 153 of the Excise Tax Act B.E. 2560 (2017), the new law simplifies the licensing processes and encourages the use of domestic agricultural products in liquor production. This reform aligns with Thailand’s constitutional provisions under Sections 26 and 40, which allow for the restriction of rights and freedoms only to protect consumers and regulate professional activities in a fair and non-discriminatory manner.

The primary objectives of the revised Act are to:

• Promote economic inclusivity by enabling small-scale producers, including farmers and community enterprises, to obtain liquor production licenses.
• Support the use of local agricultural products in the production of diverse types of liquor, including flavored or colored varieties.
• Eliminate unfair economic monopolies and discriminatory practices in the licensing process.
• Ensure that regulations do not impose undue burdens on applicants, except where necessary to limit foreign ownership or support state enterprises and small-scale industries.

Key Provisions of the Revised Act:

1. Simplified Licensing Processes (Section 3)

The amended Section 153 of the Excise Tax Act B.E. 2560 (2017) allows individuals or entities wishing to produce liquor or possess distillation equipment to apply for a license from the Director-General of the Excise Department. The application and issuance processes are governed by criteria, methods, and conditions outlined in ministerial regulations. These regulations must prioritize:

• Supporting cooperatives, farmer groups, community enterprises, and small-scale entrepreneurs in obtaining licenses for commercial liquor production.
• Promoting the use of domestic agricultural products in liquor production.
• Ensuring fairness by prohibiting criteria that create economic monopolies, discriminatory practices, or unnecessary burdens, except in cases involving foreign ownership restrictions or state enterprises.

Licenses issued under this section are valid for three years from the date of approval.

2. Transition and Implementation (Section 4)

Existing ministerial regulations, announcements, and rules issued under the Excise Tax Act B.E. 2560 (2017) remain in effect until new regulations are enacted, provided they do not conflict with the amendments. The Ministry of Finance is tasked with issuing updated regulations within 180 days from the revised Act’s effective date (i.e. June 6, 2025).

3. Pending Applications (Section 5)

Applications submitted before the revised Act’s effective date (i.e. June 6, 2025) will be processed under the amended law. If any application does not comply with the new requirements, the Director-General of the Excise Department will notify applicants to make necessary adjustments.

4. Validity of Existing Licenses (Section 6)

Licenses issued under the previous Section 153 remain valid until their expiration, ensuring a smooth transition for current license holders.

5. Oversight and Enforcement (Section 7)

The Minister of Finance is responsible for overseeing the implementation of the revised Act, ensuring compliance with its provisions and objectives.

Implications for Stakeholders:

Farmers and Agricultural Communities

The revised Act empowers farmers and agricultural cooperatives by allowing them to transform local produce into value-added liquor products. This creates new income streams and supports rural economies by leveraging Thailand’s rich agricultural resources.

Small-Scale Entrepreneurs

By removing discriminatory barriers and simplifying the licensing process, the act enables small-scale entrepreneurs to enter the liquor market legally. This fosters innovation, encourages the production of unique and artisanal liquors, and promotes competition in an industry previously dominated by larger players.

Consumers

The Revised Act’s emphasis on consumer protection ensures that all liquor produced under the new licensing framework meets safety and quality standards. Consumers may also benefit from a wider variety of locally produced liquors, potentially at more competitive prices.

Government and Regulatory Bodies

The Excise Department is tasked with developing clear and fair regulations within the 180-day timeframe. This includes establishing standards for liquor production and ensuring that the licensing process is accessible and transparent.

Challenges and Considerations:

While the act is a significant step toward economic inclusivity, its success depends on the timely issuance of clear ministerial regulations. The 180-day deadline for updating rules is critical to avoid delays in implementation. Additionally, the Excise Department must balance consumer safety with the need to minimize bureaucratic hurdles for small-scale producers. Monitoring foreign ownership and ensuring compliance with production standards will also be key to maintaining fairness and protecting local interests.

Conclusion:

The Excise Tax Act (No. 2) B.E. 2568 (2025) represents a transformative shift in Thailand’s liquor industry, unlocking opportunities for farmers, cooperatives, and small-scale entrepreneurs. By promoting the use of domestic agricultural products and eliminating unfair barriers, the act fosters economic growth, innovation, and inclusivity. As Thailand moves toward a more equitable and vibrant liquor market, the effective implementation of this legislation will be crucial to realizing its full potential.

Key Takeaways:

• Transition Period: Existing licenses remain valid, and pending applications will be processed under the revised Act and its regulations, with adjustments as needed.
• Effective Date: The Excise Tax Act (No. 2) B.E. 2568 (2025) takes effect on June 6, 2025, with new regulations to be issued within 180 days.
• Simplified Licensing: The amended Section 153 facilitates access to liquor production licenses for farmers, cooperatives, and small-scale entrepreneurs.
• Support for Local Agriculture: The revised Act encourages the use of domestic agricultural products in liquor production and boosting rural economies.
• Fairness and Transparency: Licensing criteria must avoid discriminatory practices, monopolies, or excessive burdens, except for foreign ownership restrictions.
• Consumer Protection: The revised Act ensures that all licensed liquor production meets safety and quality standards.

Author: Panisa Suwanmatajarn, Managing Partner.

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